Winners and Losers: Globalization and Technology

The biggest divide in the US may not be along party, race or gender – big as those divides are. The biggest divide may be between winners and losers: in an economy shaped by globalization and technology (G&T), who are the winners and who are the losers?

In last year’s elections, we heard voices supporting unconventional outsider candidates in both parties. That was in part the frustrated outrage of those on the losing end of G&T.

The fallacy of the whole

Globalization and technology have benefited the world overall (lifting millions out of poverty) and even the US as a whole (including helping the slow recovery from recession). That’s the problem though: None of us personally is “the whole”. Day to day, we live our lives in our own skin, in our own jobs (or lack thereof), in our own communities.  Saying we’re better off “as a whole” is like saying that, if you have one foot in a block of ice and one foot in a raging fire, on average you’re comfortable. That may be statistically accurate, but if one of those is your foot you damn well know it’s false.

In economic terms, we can argue that the benefit/cost ratio is positive for globalization and technology. The problem is, some people have been getting most of the benefits and others have been getting most of the costs. If you work in cloud-based technology or global finance, G&T works pretty well for you. But if you work in traditional manufacturing and are hoping to keep your job and benefits and pension, or work for a local bank or a local newspaper in the Midwest, or if you carry heavy student debt and are hoping to find a good entry level job, it’s not working out so well for you. You’re not smiling and saying, “It’s okay, on average we’re all doing better.”

That on average we are better off is no comfort to those without jobs or hope. It’s personal, not statistical. As Joe Biden once said: “You know, my Grandpop Finnegan used to have an expression: he used to say, ‘Joey, the guy in Olyphant’s out of work, it’s an economic slowdown. When your brother-in-law’s out of work, it’s a recession. When you’re out of work, it’s a depression.’”

The Globalization and Technology bubble

We’re blinded to this because those of us who have benefited from G&T increasingly live inside the G&T bubble. Yes, I said “us”. I’m not pointing fingers at somebody else. I’ve been fortunate enough to benefit from G&T. I sit in my home office living and working where I want to. I spend my days on Skype or WebEx or GoToMeeting or Google Hangouts with clients and colleagues from South Africa to Italy, Boston to Austin. We work on their opportunities and challenges in China, Turkey, Mozambique, India.  Then I get on a plane and fly to work with them, as nonchalantly as a daily commute to work.

What I don’t do often is pick up a phone and call old colleagues and friends in Decatur Illinois, Altoona Pennsylvania or Akron Ohio who aren’t in that G&T world. We just don’t have as much in common, as many shared concerns or travel horror stories to compare. When you win from G&T, your clients, colleagues – and yes, ultimately your friends – tend to be others who are also on the winning side. You’re in a G&T winners’ bubble; everyone else is on the outside.

Expand the winners, don’t blame the losers

The answer isn’t to try to slow down globalization and technology. It won’t work in the long run, and it probably will lead to a genuine average where we really are all in the same boat – worse off.

But the answer isn’t to ignore (or blame) the G&T losers, either. The answer is to get outside our bubble, reconnect with the rest of the economy and the community around us. Start to think about how to help more people benefit from G&T, and not just how your people can benefit more from G&T.

Try starting personally and locally. For example, I’ve been working with some bright, hard-working people with a long-track record of respecting and helping a particular Indian tribe in the US southwest. I’m just beginning to work with them, and learning a lot. In one recent discussion of economic development and empowerment, we began to hatch great ideas that wouldn’t force the next generation to choose between economic hope and staying in their culture. Except we then realized that these ideas depended on leveraging globalization and technology – and no one at the table had any idea of bandwidth and connectivity on the Reservation. That may be where we need to start.

In the long term, the real winners will be those who recognize G&T’s uneven impacts and adapt their strategies accordingly. The losers will be those G&T beneficiaries who don’t get outside their bubble – and are shocked by a growing momentum to burst that bubble.

[Opinions in this blog are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]